Negotiation: Closing the Gender Gap in Salary Negotiations

1. Negotiation: Closing the Gender Gap in Salary Negotiations Yale Women Faculty Forum, 11 June 2014 Kathleen L. McGinn Cahners-Rabb Professor of Business Administration Harvard Business School

2. Write down your most recent negotiation success. • Write down your most recent negotiation failure. • Describe your next important negotiation. Why are you here?

3. Differences in behavior and payoffs are small and contingent on context • Men are somewhat more consistently competitive than women. • Women are somewhat more consistently cooperative than men, • and • Women are more responsive to situational cues, e.g., expected payoffs, behavior of other, relational cues, social role expectations, etc. Gender in negotiations

4. Ambiguity Gender effects likely here Fix to match When gender matters in negotiation… …andnot here Salience and Relevance of Gender

5. Fix to match Impact of ambiguity Gender differences in salary negotiations vary with ambiguity MBA salaries in first job: • Industries with clear compensation standards 60% of sample: No significant gender effects • Industries with ambiguous compensation standards 40% of sample: $11,000 gap in starting salary Bowles, Babcock & McGinn, 2005

6. Impact of Gender Triggers Bowles, Babcock & McGinn, 2005

7. Impact of Gender Triggers Bowles, Babcock & McGinn, 2005

8. Many negotiations, such as those for salary, resources and promotion are ambiguous and full of gendered assumptions, so: • Reduce own & others’ ambiguity • Identify and be aware of potential reactions to gender triggers • Apply lessons from Axelrod’s Prisoner’s Dilemma Negotiating for career success

9. Prisoner’s Dilemma Repeated for 200 moves Round Robin Tournament Cooperate Defect 3 5 Cooperate 3 0 0 1 Defect 5 1 The Evolution of Cooperation, Robert Axelrod

10. Entries from game theorists Winner: Tit-for-Tat Cooperate on the first round Do whatever the other player did on all subsequent rounds Overall, initially cooperative, reciprocalstrategies did best The Evolution of Cooperation

11. Begin with cooperation Cooperate up front Never be the first to defect. Practice reciprocity Return cooperation for cooperation, defection for defection. Don't be envious Aim to do as well as you can, not better than the other side. Be clear Don't try to be tricky. Axelrod’s Lessons

12. Consider your role in their choices • Manage others’ perceptions • Foster relationships • Manage resistance • Manage the process Applying Axelrod’s Lessons to Negotiations

13. You want them to trust you and others Act trustworthy and build a cooperative environment • You want them to see benefits of sustained cooperation Act cooperatively; avoid needless provocation Encourage beliefs about negative consequences • You want them to work together to create shared value Involve others in developing and selling vision Model valuing others’ gains as well as your own • You want them to reject competitive choices Seek explicit agreement and avoid ambiguity Develop compliance mechanisms Consider Your Role in Their Choices

14. What I do is not what they see: My actions What they see Opportunistic Slow Can’t see the details Out for herself Inconsistent Manipulative • Strategic • Long-term perspective • See the big picture • In organization’s best interests • Flexible • Collaborative Manage Others’ Perceptions

15. Trust, accountability & reciprocity all rely on acknowledged interdependence. Others need to believe that working with you better fits their interests than working independently or against you. Foster Relationships

16. Anissue is grants management. • A positionis a demand. I want a full time research associate to handle grants management. • Interests are the reasons behind the demand • I can’t run my studies while simultaneously writing for grants and responding to funders. • I need to focus on publications. • I’m losing potential funding • The Department wants faculty sharing limited resources. • The Chair wants to make maximum use of limited slots. • The School wants me to publish and get promoted. Foster Relationships:Differentiate between Issues, Positions & Interests

17. Ask about reasons Why is this important to you? Ask about priorities What are the key things you need? How important is this issue to you? Relative to others? Ask about time Does the value of this issue change over time? For how long has this been an issue? Ask about possibilities What if we did it this way? Help me understand why this will or won’t work… Use “If… , then…?” questions, “Yes…, and…” responses If I agree on A, will you be willing to move on B? Yes, I’ll work on this, and while I’m doing this, you can… Ask Questions to Learn About Interests

18. “It were not best that we all think alike, for it is the difference in opinions that makes horses race.” Mark Twain

19. Who needs to be part of the negotiation? How can I appreciate their situation? How can I make them feel legitimate and understood? Look at their story • provide opportunities to talk about concerns • ask questions about their concerns Appreciate their ideas • leave space for multiple possibilities • link their ideas to yours Appreciate their “face” • show respect for their position • help them exit gracefully Foster Relationships: Create Connections

20. People resist for good reasons • Technical – it won’t work • Cost/Benefit – costs too high relative to benefits • Intellectual – disagree • Political – will lose alliances • Process – uncertainties • Personal costs – loss of control, power, expertise, benefits; more work Find out why people are resisting and deal with the source of resistance Manage Resistance

21. Small wins are: • Concrete, complete, implemented outcomes of moderate importance • Controllable opportunities that produce visible results • Noticeable changes in relatively unimportant variables or relatively small changes in important variables A series of small wins may attract allies, deter opponents, and/or lower resistance to subsequent proposals Manage Resistance:During Stalls, Focus on Small Wins

22. Encourage everyone to consider what they want and what they’re bringing to the table What is your value and how do you make it relevant? What are you hoping to achieve by working together? • Learn as much as you can outside the negotiation What benchmarks can you use? What do you know about others’ perspectives and interests? How can you learn more? • Develop alternatives What happens if there’s no deal – To you? To them? How can you introduce these choices into the negotiations? Manage the Process:Get all parties into Good Starting Positions

23. Be flexible on process • Share information about interests, priorities, and preferences • Ask questionsabout interestsand priorities & listen to their answers • Promote collaboration and trust by building in moves that motivate and reward reciprocity Don’t give information or value away without getting something in return -- Unilateral collaboration does not generally provide incentives for others to collaborate • Circle back as new issues, interests and options arise • Give it time– Be careful not to end discussions too quickly Manage the Process: Create Value through Process Choices

24. Step away to reset perspective • Name what is happening • Explore assumptions more deeply • Explore consequences of no agreement Manage the Process:Keep Going when Negotiations get Stuck

25. Consider what you wrote about your next important negotiation. • Write what you can do to improve your chances of success in your next important negotiation. Back to why you’re here

26. Listen Transforms Understanding Learn Together Transforms Relationships Create Shared Value Agreements Transforms Own and Others’ Outcomes Lead through Your Negotiations